Waste reuse industries struggle for growth in Oregon
By JANET COLWELL
For The Register-Guard June 3, 2002
ENTREPRENEURS often succeed by spotting opportunities that others have missed. That's especially true in the waste reuse industry, where one person's junk becomes another person's raw material.
Eugene's Scientific Developments, for example, saw a niche in turning one of society's grubbiest castoffs - used tires - into a necessary yet little-noticed product: rubber bases for the orange cones and tubes used by road construction crews.
The company shreds whole tires and runs them through a cracker mill until the mixture resembles coarse crumbs. Then it molds the crumbs into cone bases.
In business since 1974, the firm sells its products nationwide to manufacturers of plastic parts and to wholesalers, President Keith Dahle says. It has about $2 million in annual sales and employs 16.
Dahle's firm is one local example of the waste reuse industry, a field that experts say has the potential to turn garbage into profit, creating jobs and boosting economies along the way.
Many communities and states nationwide - including Oregon - have created programs to collect traditional, easily reused waste products - newsprint, office paper, cardboard, glass, metal - and channel them to industry.
But waste reuse advocates say that a broad range of other potentially valuable waste materials are being neglected. Oregon isn't doing much to encourage reuse businesses to grow, these advocates say.
According to the Waste-to-Work Partnership, a program of the Center for Watershed and Community Health at Portland State University, two-thirds of the waste generated in Oregon and Washington is still being dumped in landfills or incinerated.
"Major economic, social and environmental opportunities are being lost as we bury and burn resources that are actually valuable raw materials," says the Partnership in its recent report, Making Waste Work. "A substantial portion of the waste material that is reused or recycled is manufactured into new products outside the Pacific Northwest - this represents more than 3,000 lost jobs and $100 million in lost revenue for the region."
It'll take a major change in civic mindset and state legislation to alter this state of affairs, experts say.
Dahle, for example, takes in the equivalent of 300,000 tires a year, either directly from tire dealers or through tire collection companies that process them into chips. That diverts about 1,800 tons of material a year from landfills. But far more tires are being thrown away.
"Landfills are one of the cheaper methods to dispose of tires now," Dahle says. "Other states have set up tire programs to encourage recycling, but there are no government incentives in Oregon."
The Waste-to-Work report urges state leaders to pursue waste-based economic development, which focuses on creating new businesses, products and jobs through reusing waste. If all of the usable waste currently sent to Oregon landfills was collected and made into new products, the authors predict that 22,000 jobs could be created.
"We're hoping to increase the recycling rate over the next decade, but what will we do with all that material?" asks Diane Garcia, executive director of the partnership, which will move to the University of Oregon campus in July. "There's no push in Oregon to increase the number of businesses using waste-based materials or to help existing businesses grow."
Greenhouse film, plastic pots
Dari Jongsma, president of Agri-Plas in Salem, is all too aware of Oregon's lack of support for waste reuse.
Her 40-employee company is the only one in the Northwest that collects and processes agricultural plastic, including baling twine, greenhouse film and nursery pots.
Agri-Plas sells the waste to manufacturers that turn it into new products, including house siding, automotive parts, decking lumber and roofing.
The waste plastic exists in abundance. Oregon has 2,011 registered plant nurseries, for example. But Agri-Plas has tapped only 50 so far, and the company's growth has been hampered by lack of state support.
Oregon at one time offered a tax credit to companies that used recycled plastics in new products, but the Legislature last year let the credit program lapse.
"When that happened, our business really dropped off," says Jongsma, adding that her firm has either broken even or lost money in its seven years in business.
Jongsma keeps at it out of a conviction that state leaders eventually will see the light.
"We've taken on a solid waste problem that's a huge issue for rural communities," she says.
Last year, the firm took in 6 million pounds of agricultural plastic, but that's barely a drop in the bucket, says Jongsma. About 70 percent of nursery pots, for example, are left out in the field, burned or tossed into landfills, she says.
Oregon may have a way to go in developing its waste reuse industry, but it is doing better than many other states, says David Allaway, waste prevention specialist with the state Department of Environmental Quality.
The state's goal is to recover 50 percent of its waste stream, with an emphasis on reusing materials wherever possible
To that end, Oregon offers two income-tax credits - the Business Energy Tax Credit and the Pollution Control Facility Tax Credit - that cover to 35 percent to 50 percent of the capital cost of eligible recycling facilities or equipment. The Reclaimed Plastic Tax Credit expired last year after the Legislature failed to renew it, says Allaway.
The state also offers grants to local governments, which can pass the money on to private businesses engaged in recycling and reuse.
In 2001, for example, Eugene won a $28,360 grant for BRING Recycling to buy equipment and fund a program that salvages materials during building demolition.
Also, the DEQ has begun to promote the Seattle-based Industrial Materials Exchange of the Pacific Northwest, which connects buyers and sellers of surplus materials. The number of listings on the exchange has increased 43 percent in the three months since the promotion began in Oregon, Allaway says.
Still, the state could do more, says Terry McDonald, executive director of the St. Vincent de Paul Society of Lane County, which runs a mattress-recycling program.
The nonprofit organization has a mattress factory in Eugene and a deconstruction facility in California, where it sends old, damaged mattresses to be taken apart and rebuilt or recycled for other uses.
Alameda and San Francisco counties in California pay St. Vincent to take mattresses to the deconstruction facility. Oregon does not.
The only way St. Vincent can afford to process mattresses from Oregon is by adding them to the subsidized California loads, McDonald says.
"Oregon doesn't have the targeted diversion goals that California has," says McDonald. "If we didn't have the California operation, we would be sending our (Oregon) mattresses to the landfill."
Still, St. Vincent has found ways to recycle in Oregon and make money that it uses to help the poor. The agency's latest program uses the cutting scraps from prison-manufactured denim clothing to make mattresses and dog beds.
The agency also operates a Eugene wood shop where it combines construction wood scraps with new materials to make furniture.
Aurora Glass, one of St. Vincent's largest operations, makes gift glass from old windows.
In all, the recycling operations employ 24 people in Oregon and bring in about $1 million a year in sales, McDonald says.
Local governments have created some incentives to reprocess yard waste, which is done in Lane County by Rexius Forest By-Products and Lane Forest Products.
Lane County, for example, has yard-waste drop sites at its rural transfer stations, and some cities, including Eugene, have mandated yard waste curbside pickup. So, instead of heading to the landfill, the material goes to Rexius or Lane Forest Products.
Rexius takes in about 20,000 cubic yards of yard debris and 10,000 cubic yards of wood waste at its collection sites in Springfield and West Eugene, says Jack Hoeck, vice president of production.
Most of the materials come from residential and commercial landscaping, and a smaller portion comes from the curbside program.
Rexius grinds the waste into compost or mulch and sells it across the Pacific Northwest.
However, getting into the yard waste recycling business isn't always economical, says Hoeck, who is vice chairman of the Composting Council of Oregon.
Landfill fees, which vary throughout the state, are a major part of the equation.
The lower the fees, the less incentive someone has to bring the waste to Rexius instead of dump it in a landfill.
With no statewide financial incentives to recycle yard waste, the composting industry has remained stagnant over the past five years and the number of companies has dropped recently, says Hoeck.
Raw vs. Recycled
Establishing such things as curbside pickup programs are a start, but they don't solve the problem of how to encourage reuse of a broad range of materials, says Garcia of the Waste-to-Work Partnership.
A number of barriers to entering the waste reuse business need to be addressed, she says.
The most glaring is economic: Many raw materials are still cheaper to buy new than in a waste form, says Garcia.
For example, because oil is inexpensive, it is often cheaper to buy new plastic products rather than those made from waste plastic that has been collected, sorted and remanufactured.
Other barriers include lack of knowledge about waste materials that can be reused; lack of access to reuse technology; lack of guaranteed, steady supplies of needed waste materials for reuse; and lack of government loan and grant programs.
Waste-to-Work is trying to address some of those issues. The group, funded with private donations and foundation grants, provides technical and business-planning help aimed at aiding reuse firms.
One of its main goals is to create partnerships: For example, the group helped link St. Vincent de Paul with the Oregon Department of Corrections for the prison-denim recycling program.
Interest in the reuse industry has increased in recent years because so many community recycling programs have been established over the past decade, Garcia says.
Groups such as Waste-to-Work, formed two years ago, see a golden opportunity to bolster the economy and create new jobs through nurturing the growth of an environmentally sound industry.
But it won't work without widespread support - including more tax incentives or subsidies, advocates say.
"This field is just starting," Garcia says. "If we can get the right people together - government, waste haulers, economic development folks, recyclers and entrepreneurs - there's a lot of potential to develop new businesses in Oregon."
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